No on TransCanada
Published Thursday, July 31, 2008
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Stumble It!To the editor:
The Alaska State House voted 24 to 16 on July 22 to grant an exclusive license to TransCanada to build an Alaska gas pipeline. But there is no guarantee that it will actually be built.
The Alaska state Senate still needs to vote on it.
I wrote an e-mail to all 20 state senators saying please do not grant the exclusive license to TransCanada at this time.
The Denali Pipeline project is already going forward and has the best chance of succeeding during the window of opportunity. This is because it is in perfect alignment with the North Slope leaseholders (producing oil companies).
The AGIA/TransCanada proposal, however, is seriously cross threaded with the leaseholders right at the onset.
The advantage of the Denali Pipeline is superior economic viability. This is because the shippers of the gas (the producers) will have direct control of the costs and can keep them down. I do not believe TransCanada is as motivated to keep the costs down. This is because cost overruns can be passed on to the shippers.
An “open season” (where producers and customers get together and sign 30-year commitments) occurs prior to ordering the massive amount of pipe. If the producers sign on the dotted line, they could be caught over a barrel if TransCanada has serious cost overruns.
Many people think that a TransCanada open season will fail. This could delay a gas line beyond the window of opportunity.
There has been enough delay. The 2006 proposed gas line fiscal agreement (which had given the state of Alaska a 20 percent share of the gas pipeline) was shot down by the present administration and by the swirling anti-oil company tide that sweeps across the people from time to time.
However, there are also independent residents in Alaska who do not have a knee-jerk dislike and suspicion of oil companies.
Please write to your state senator. Our future is at stake.
Please see my letter to the state senators at www.alaskafalcon.com.
Community Discussion
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After they find out that Exxon Mobile made 11.7 billion dollars in this quarter think that might sway them into backing AGIA.
Vote today and vote Yes on AGIA! There is no reason why we have waited over 30 years for a gas line. There is no reason why we should wait another 30 years to lay the cornerstone to get a gas line built!
Or: listen to the two former governers that didn't get it done and follow them into oblivion! Senators, it's your choice. Leaving this much work unfinished is as popular as having a clean coal plant that doesn't produce electricity!
ANY pipe is INSANE.
Why will no one discuss how much Prudhoe & other OIL is lost.
You think Exxon won't SUE ?
And get Punitive Damages ?
ICEBEAKERS will carry more Oil after the Pipe shut-off date.
...currently ignored -- we are also PRETENDING Icebreakers are not HALF the transport costs of pipelines -- the 1969 trip of tanker Manhattan was INTENDED to prove it could replace a pipeline -- its lower cost was a BONUS -- and, alas, one they only knew about when the pipe overran by a factor of 3 -- eight years later.
The Calculation:
Use "half-life": Oil starts out at 300,000 barrels per day = 109.5 million per year, at current 6% decline rate with pressure CONSTANT (gas is pumped back in, CO2 also, & extra water/propane mist to make up for Oil lost & Gas burnt; before water injection in 2001 Oil had begun to "do a Burma", the rate of decline going from 9 to near 12% in a short time, so TAKING THE GAS radically drops pressure -- I figure at least 20% ...
With (log 0.5 over log 0.94) = 11.20 year half-life for 6%, we have as much after the half point as before, and between full (109.5) and half (54.25), we average near 75% -- I use .707 so:
6% decline = 109.5m bbl/year x 11.20 yr x 7.07 x 2 = 1584 m. bbl.
20% decline = 109.5m bbl/year x 3.106 yr x 7.07 x 2 = 439 m. bbl.
Adding ADOR's 300 m bbl estimate for BEFORE Oil Pipeline Shutdown, we have 1584 -439 +300 = 1445 million barrels.
With the AGIA forecast of $60 ($55 over Cost) Oil & $8.57 Gas ($3.57 after TC cost, Alaska's share = $1.5 ) & 25 years of 4 bcf/day (after transport losses) x 365 days = 36.5 Tcf
Oil LOSS = $ 79.5 B (triple Damages $238 Billion)
Gas Gain = $130.3 B
BUT Alaska pays $238 Billion out of ITS share = 54.75 B = WAY SHORT.
THIS BANKRUPTS THE STATE.
And that is assuming Gas gets to a 7.5:1 ratio to Oil cost when today it is 13:1 ($125/barrel to under $10/1000 cu.ft.)
At today's prices:
Oil = $120 over Cost = $173 Billion
Gas = $5 over cost (2.50 Alaska ?) = $ 91.25 B Alaska Revenue.
But that is not the REAL problem.
Before the pipe corrosion shutdowns, BP had fond hopes of improving to a 3% decline.
We have 15 years for Technology to improve.
At 3% loss rate, lost Oil is :
... 3079 million barrels
= $369.5 Billion,
= $1,108 Billion with Punitive Damages (DELIBERATE so triple, Accidental = x 2).
Alaska's Gas Revenue remains $ 91 Billion
The remainder, assigned by Property tax valuation in Municipal Bankruptcies:
$1,525,501 per Alaskan !
You'll see MASSIVE JOB LOSS in 2018 as companies FLEE THE STATE TO AVOID BEING LIABLE.
Don't do it, Alaska!
Besides, think: the EXTRA Oil is 52% to Alaska, right = $192 B @3% & $125/bbl.
My present to You: $192 Billion.
LNG sites all along the Coast will ship 10 times the Prudhoe Gas anyway, & in 5-6 years not 10-12.
What all that math failed to mention was that in 1969 when tanker Manhatten drove all the way south through the ice, the huge (I'm assuming diesel) engines on that boat only cost a few dimes a gallon to run. The cost of SHIPPING has skyrocketed which is why everything else is so expensive right now.
There are no food shortages, there's no wood shortages, there's not even an OIL shortage. Prices are inflated due to market speculation and the fuel required to ship items (whether by truck or boat) is as a result, much higher. Even the president of OPEC acknowledged the price for crude is way too high. Does that mean it will go down? Hopefully yes but probably not.
If I remember correctly the Denali Pipeline does not even provide take-off points in Alaska, so why would any Alaskan even want this line built? Are we all going to need to move to Canada to get NG? I sure hope the AGIA gets passed soon so we can move on and hopefully someday get gas. Until then I will be burning greenwood and coal in my new Boiler, no one can afford dry wood in Alaska anymore.
According to the info on Denalis' website they will have multiple take off points throughout the state, Fairbanks included.
Just build one already. I don't care who does it any more, so long as it happens. All of this "If we do it this way it won't happen for 10 years" is the reason it hasn't happened. If we had started it 10 years ago, there would be gas flowing by now. We can argue the best possible solution indefinitely, but if we do we'll never actually get a solution. Quit arguing and get it moving already.
Pragmatist, I agree. Just do something!!
Randy get a grip! This is the first chance in 30 plus years to actually get a natural gas pipeline started, and you want to start all over again? A pipeline in the next decade, beats no pipeline ever. Think about it Immediate gradification is not the goal,a pipeline is.
Right on woodman.
Pass AGIA ASAP
I hope that the legislature approves AGIA. AND, I am glad to see ANGDA pushing for a pipeline. We all need low cost energy and with diesel selling at $8.00 a gallon in Rural and Remote Alaska, we need another source of energy to keep our electric generators going and heating our homes. I think ANGDA is planning on off take points so that villages along the Yukon/Kuskokwim/Northwest/Southwest/Aleutian coast will be able to use CNG. I hope ANGDA can move ahead quickly and that the legislature will vote YES on AGIA so that we can start planning on converting our diesel generators to gas to lower our cost of energy.
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ONAPA, Please remember that the last governor is gone because he was selling out Alaska and building the same pipeline that TransCanada is proposing. When Alaskans found got the chance, they booted him out. I hope all the politicians that are carrying on Frank's legacy get the same deal he got. Alaska is the first market the gas should go to. Alaska First!
Voting no on AGIA/TransCanada will let the oil companies know that the ball is back in their court. What's to keep them from delaying as they have been the past 30 years?
I would rather see competition in the new gas field than monopoly.
Yes on the AGIA license.
EOD_Dave,
Frank got the boot for cutting deals on tax rates. He said ACES was too stringent. That's why he got beat. He promised what he could not deliver on Natural Gas because he was dealing with the oil companies instead of taking outside bids. AGIA has requirements for the state. Frank would have caved to Denali which said it was not economical. The State had a fiscal problem when Frank was in charge. ACES solved that problem. People also did not find his choice of US Representative to be very popular. Senator Murkowski is doing well despite her father. As for the Senate stopping their comittee hearing for two former governors, what are the chances that any other constituents could have the same results. Or does former employment qualify a few Alaska residents to receive special priveledges over other residents?
VOTE YES or find a new job that pays you to do nothing.
Oh by the way, the Denali plan is the Alaska section only of the Trans Canada plan which is what Exxon proposed to do to save their lease at Point Thompson. Denali's work stops at Canada, and we are left with a line full of gas to the Yukon Territory with not input from Alaska.
So tell me more about this great plan Denali has to keep us the richest state in the union? They are waiting for Trans Canada to build the Canadian section? C'mon, do the math. Put both ends together you get AGIA without the State Requirements. Who wins, and who loses again!
who cares the vote is finally in, bye bye Denali, HELLO Transcanada........
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